About a dozen U.S. packing plants, fairly large packing plants, are important for us to send our Canadian cattle to, whether we send them as feeders to get finished in the U.S. or feed them in Canada and ship them for immediate slaughter.
When COOL came into effect, we lost access to about two-thirds of those facilities. Basically, the companies in the U.S. determined that the easiest way for them to comply with COOL was just not to take the Canadian cattle at certain facilities.
For example, Tyson, which had been taking Canadian cattle at four different facilities, said three of the four were not taking them. They'd take them only at Pasco, Washington. They'd only take them two days a week, and they were going to drop the price on them. That was their company strategy to deal with the logistical complexities of having to keep cattle separate, to label different meat with different origins.
JBS did the same, and other facilities did similar things.
One of the things we were pleased to see after the WTO consultations took place was that the Americans agreed that they had created a structure where Canadian cattle fed in the U.S. had an advantage over Canadian cattle fed in Canada. They said, “You can take those two different groups of Canadian cattle, commingle them, and label that beef all the same.”
That's what came out in January and caused the government to say, “Okay, we'll suspend the case until we can evaluate how the market responds to that.” In the discussions we had with the companies in the U.S., Tyson, for example, said, “You were at four, and we dropped you down to one plant. We're going to start taking them at two more plants.” So now we're back to three out of four plants, and the fourth one is related to the Korea issue that Dennis mentioned earlier.
That was a very positive development for us. We had been losing $90 a head because of the situation since September. We felt that this was going to get us a chunk of that $90 back, but we won't know until we see how the market reacts.
With what the secretary has done last week, he has said that rule can come into effect, and it will come into effect on time, on March 16. That's positive. That's a good thing. But at the same time that he was giving with the one hand, he was taking away, potentially—potentially is the important word—with the other by saying, “I want companies to voluntarily, on every package of meat, show where it was born, where it was raised, and the country where it was slaughtered.” By doing that, he's effectively causing all the cattle to have to be segregated again. The only way companies can comply with that is probably back to the strategy, and even worse than the strategy, that they weren't taking Canadian cattle at certain facilities.
Our response to the government definitely has been that this is very negative. It's worse than it has been. We have to use all actions, including getting right back to the WTO, if that's what we need to do.
The words I take from the minister are that he's evaluating this day by day; he's having discussions with his counterparts, and officials are doing the same. I think there's a role for members of Parliament to talk to congressmen as well.
The catch in there is that if these changes are implemented and the negative consequences do occur, we're right back at the WTO. So it's important to have that thread to try to prevent that from happening.